James Watt, an executive with the company, feels the Stunner line should be discontinued to increase the company's net income.

$($a$)$

Compute current net income for Pharoah Company.

Net income $

$($b$)$

Compute net income by product line and in total for Pharoah Company if the company discontinues the Stunner product line. $($Hint:

Allocate the $$306,000$ common costs to the two remaining product lines based on their relative sales.$)$

Tingler Net Income $

Shocker Net Income $

Total Net Income $

$($c$)$

Should Pharoah eliminate the Stunner product line?

No

Why or why not?

Net income would

from $

to $

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